Cash advances affect your credit score! Learn how?

Many credit card issuers provides a service to cardholders while allowing them to withdraw a certain amount of cash, either through an ATM or directly from a bank or other financial agency. Cash advances typically carry a high interest rate – even higher than credit card itself – and the interest begins to accrue immediately. On the plus side, cash advances are quick and easy to obtain in a pinch. Sometimes businesses with less-than-perfect credit use cash advances to finance their activities. In some instances these advances are even paid for with future credit card receipts. The amount of the cash advance depends on the credit score of a business and its credit card sales. In almost all cases, cash advances should be viewed as a method of last resort. Taking out a cash advance has no direct impact on your credit score, but it can have an indirect impact in various ways:
                                

• The interest on cash advances is significantly higher than the interest on regular purchases, and that interest will get paid off last, meaning it will collect high interest for a long time. This is true even if you are offered a no- or low-interest promotion, as it likely will not apply to the cash advance amount. If this affects your ability to pay the payment on the card, that could affect your credit score.
• It will raise your balance, which will raise your credit utilization, a measure that credit scoring models use when generating a credit score.
• A balance transfer or any of the resulting interest that puts you over the credit limit can lower your credit score. Even after the card is paid down, your credit report will show the highest balance reported, and other potential lenders will see that you were over the limit at one point, which could hurt your ability to get new credit.

All the above circumstances can lead in a cash advance negatively hurting your credit score.

Source: Secondary